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We uphold shareholder-oriented management and pursue high growth, high profitability and high share value to build long-term, sustainable growth in shareholder value. Placing importance on regular dividend payments, we seek to increase our dividend payout to around 30% of our consolidated net income. In alignment with this policy, we paid out 45 yen per share for the six months ended September 30, 2012, which translates into a payout ratio of 22%. We have determined the year-end dividend to be 50 yen per share for the fiscal year ended March 31, 2013. As a result, the full-year dividend will be 95 yen per share, an increase of 5 yen from the fiscal year ended March 31, 2012.
In the meantime, we announced in June an increase of the repurchase quota under our one-year-long share repurchase plan initially approved on February 2012. The amended share repurchase plan authorizes us to repurchase up to 5 million shares of, or 40 billion yen worth of, its outstanding common stock, with the repurchase period remaining unchanged. This compares with the previous repurchase limit of 3 million shares of, or 25 billion yen worth of, its outstanding common stock under the original repurchase plan. We will stay focused on our shareholder-value enhancement initiatives in ways that effectively reflect your expectations.
Overview of the Six Months Ended September 30, 2012
Net Income for 1H FY2012 Up 1.9% Y/Y
The global economic environment during the six months ended September 30, 2012 turned out to be more challenging than we had initially expected as persistent weakness became more evident in the European economies and the emerging-market growth engine slowed to a standstill. In the harsh business environment, however, we stood firm in our commitment to growing into a strong business group and strove towards improving sales and profits by proactively seeking new opportunities in emerging markets, acquiring new businesses, and by streamlining our overall cost structure. As a result, we were able to finish the six-month period with year-on-year profit growth despite a 1% decline in sales partly attributable to yen's appreciation. Our operating margin rose 0.7 percentage points to 12.1% and net income increased 19% from the same six months of the previous year.
Having announced six M&A transactions since the beginning of this year, we are aggressively pressing forward with portfolio transformation in line with an effort to expand our revenue streams from the automotive, household, commercial and industrial products markets.
Revision to FY2012 Guidance
FY2012 Full-Year Forecast Revised Downward, Reflecting Global Economic Slowdown
The underlying macroeconomic conditions still do not inspire optimism and we believe our businesses will remain exposed to a sluggish global demand environment towards the end of the fiscal year 2012. Factoring in downside risks, including those posed by the lingering European debt problems, we have lowered our full-year sales guidance from 780 billion yen to 720 billion yen (down 6% y/y) and operating income guidance from 95 billion yen to 80 billion yen (down 9% y/y).
In an effort to build profit amid weak sales growth prospect, we launched in October 2012 a second round of the emergency profit-boosting scheme (WPR Part 2) to raise operating margin by 3 percentage points from the current 12% level. This emergency scheme follows the cost optimization method we implemented in the wake of the Lehman crisis in 2008 to cope with the unprecedented economic collapse by generating profit on halved sales.
New Mid-term Strategic Plan
Along with the revision to our financial guidance for FY2012, we made a careful review of our mid-term growth plan (Vision 2015) and laid out a strategic roadmap that sets new directions to explore over the medium term. With a keen focus on building up financial strength unimpeded by economic doldrums, the new mid-term strategic plan places significant weight on margin growth. Although our sales target for FY2015 has been lowered to 1.2 trillion yen from 2 trillion yen initially set under Vision 2015, our operating margin target now ambitiously points towards 15%, the highest level in more than ten years.
Meanwhile, we have taken strides in transforming and expanding our business portfolios by giving special emphasis to automotive, household, commercial and industrial applications. Our current expectation is that sales from these target markets will add up to approximately 600 billion yen in FY2015. We are planning to increase annual sales of automotive products to 300 billion yen, half of which may come from acquisitions, with an estimated operating margin of 7.5%. At the same time, we are expecting to earn another 300 billion yen in sales of household, commercial and industrial products, including the combined sales of Ansaldo (Italy), Avtron (U.S.A.) and Kinetek (U.S.A.), with an estimated operating margin of 15%.
December 2012
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Chairman of the Board, President & Chief Executive Officer
Shigenobu Nagamori |
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| | WPR was named by Shigenobu Nagamori of NIDEC CORPORATION based on his unique business management method in 2008.
WPR™ is a trademark of NIDEC CORPORATION in Japan.
WPR© Shigenobu Nagamori NIDEC CORPORATION 2008 |
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